Lipi Agrawal | HRKatha | New Delhi | Tuesday, 06 June 2017

According to the Maternity Benefit (Amendment) Act 2017, organisations are expected to implement the creche benefit clause by July 1.

The Maternity Benefit (Amendment) Act 2017, a landmark act which placed India amongst the league of progressive, developed countries with respect to maternity benefits, also raised a challenge for employers who do not have the requisite plans for providing the benefits.

The act not only extends the maternity leave benefit period but also introduces leave for adopting and commissioning mothers, work from home provision, crèche facility, nursing provisions and notification of these benefits as the related mandates.

As a dipstick measure, ProEves conducted a survey, ‘Managing the Maternity Benefit (Amendment) Act 2017’, to capture market practices with respect to how companies are complying with the act.

In an interesting revelation, the survey report states that only 10 percent of the surveyed organisations already have or are looking to have an onsite day care to support employees in childcare. Whereas 81 percent companies are considering a day care tie-up (near site, shared set-up, multi-site), 9 percent, surprisingly, are still to act upon it. According to the act, organisations are expected to implement the creche benefit clause by July 1, and as the date approaches organisations will have to gear up for appropriate arrangements.

With tie-ups being the most prevalent approach, companies must decide on the distance from the day care centre such that it is comfortable for employees to pick, drop and nurse the child. For companies with onsite day care, a less than 1 km distance exists, while those with tie-ups are trying to achieve a distance of 3-5 km.

The report shares that 46 percent of the companies are looking at sharing the cost. Also, around 70 percent of companies looking for a near site tie up are looking at ways of sharing the cost. Quality childcare comes at a premium. Hence to be able to provide for the same companies have to look at a co-pay model.

Furthermore, there is no child age cap provided in this act. In the absence of any guidelines in the act, companies are complying with the age provision mentioned in The Factories Act where the crèche facility should be provided up to 6 years of age. For companies which have an onsite day care facility, utilisation is maximum up to the age of 3-4 years, before the kids start going to proper school. On the other hand, as per the market practice, most day cares take children up to 8 years of age.

As mentioned earlier, the clarifications to the act state that companies need to provide for creche facility w.e.f July 1 and hence most companies are looking at the April-June quarter for implementing the same. The average time taken from mapping the demand, to centre short listing, SLA finalisation and rolling out the details to companies is 3–4 weeks. It is therefore extremely important to act now.

Providing for day care benefit is a sensitive policy decision. Companies need to ensure that they have done the required checks prior to tie-up. This includes third party audits, checking certifications, having robust service level agreements, and seeking references from moms. It is also important for companies to demonstrate that they acted appropriately, reasonably, and within the best professional standards when deciding the right partner to avoid liability and costly lawsuits.

As per the survey that studied 70 organisations covering various sectors like FMCG, IT, manufacturing, ITES, e-commerce, retail and financial services, all surveyed companies are rolling out this benefit in their headquarters. All manufacturing companies are launching day care for their factories (as per the definition of establishment which covers factories) as per the MB Amendment Act while 60 percent of the companies are rolling it out in branches with more than 50 employees.

On a positive note, most companies are taking the amendments earnestly, as the policy changes will help in achieving a gender balanced workforce which is a priority for companies. Working parents is an increasing pie of the working population and enabling provisions like crèche facility, work from home support will not only help women during maternity but also help working parents. Contrary to the earlier negative reactions, in the survey 67 percent of the surveyed companies are positive about the new amendments to the Maternity Benefit Act, while 24 percent are neutral.

In addition, with the extended Maternity Leave Benefit period, India now qualifies among the 16 countries having the longest paid leave for new mothers. Singapore has 16 weeks of paid leave (8 funded by the employer and remaining 8 through public funds). In Australia and Canada the respective maternity leaves of 18 and 17 weeks is paid by public funds. In India, the maternity leave funding is an investment into gender diversity that companies are mandated to make.

This makes the cost of post maternity loss incredibly high for companies in India, and hence companies should look at spending at least 1 percent of this cost in maternity connect programs to safeguard the investment made on maternity leave. These programs contain a mix of maternity support, professional counselling and overall grooming for the mother to get back to work.

The report also states that in line with the act’s provision relating to work from home (WFH) for women, to be exercised after the expiry of the 26 weeks’ leave period, 43 percent companies agreed they already have a WFH policy for all employees making it an inclusive policy. About 36 percent companies said they are in the process of drafting such a policy.

Furthermore, the report suggests that to make this policy work, companies need to equip line managers with standard guidelines on roles that are amenable to work from home and educate employees on ways of working that support this. The act also makes it obligatory for the company/manager to lead the communication around maternity benefits for which, on an average, companies are using at least two different channels of communication by putting the policy on the intranet and adding the benefits to the offer letter.

With most companies wanting to be inclusive employers, 85 percent provide paternity leave and support new dads in the transition to parenthood. Campaigns like #sharetheload (P&G) &#fatherscanbemotherstoo (Snapdeal) emphasise the role of dads.

Beyond the provisions of the amended act, companies provide benefits like additional (unpaid) leave, option to move to part time work, workshop for new parents and online maternity care query support.